Delta Airlines (DAL) stock rallied more than 8% following the company’s earnings report this morning.
The stock had seen tepid price behavior ahead of Delta’s earnings report as investors are beginning to worry about consumer spending again.
For the quarter, Delta beat its revenue expectations handily. The company earned operating revenue of $15.6 billion in Q4 and $61.6 billion for the full year. The revenue growth represents a 9.4% increase from the fourth quarter last year, the company’s strongest since October 2023.
Delta’s earnings per share also beat expectations. The company earned $1.85 per share, $0.09 ahead of the market’s target.
Shares of Delta have been trading in a tight consolidation around $60 ahead of the report. The tight range is associated with investors taking a “wait and see” approach to the report. Those concerns stem from recent headlines surrounding inflation in 2025.
Delta and other airline companies are considered consumer discretionary stocks. This means that they will traditionally shift into a bearish trend during recessionary periods as consumers tighten their belts.
That wasn’t the case during the economy’s latest bout with inflation as travelers were still rebounding from the pandemic restrictions.
Another round of inflation may be different this time around as consumers find themselves with less savings and more debt.
Shares of Delta have represented the “Best in Breed” of airline stocks and should continue.
The stock pressed new highs on today’s rally and is preparing to move higher.
Momentum is set to turn positive again according to the stock’s 20- and 50-day moving average.
The combination of positive momentum and new highs should target $80 over the next 3-6 month time period.
— Chris Johnson
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Source: Money Morning